Jack Knox: Buckle up Victoria, analyst says gasoline may hit $ 1.70

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Jack Knox: Buckle up Victoria, analyst says gasoline could hit $ 1.70

Victoria gasoline prices rose 11 cents per liter on Monday, hitting 1,629 at some gas stations. I think that means the pandemic is over.

Thank goodness, hadn’t the price dropped below a dollar-liter just last spring? Yes, yes, but that was also the case when we were shaking under our beds with a deer rifle in one hand and a three-layered packet of 48 Purex in the other. The streets were as empty then as the wallet is today.

Why the sudden jump on Monday? The simple answer is: supply and demand. People are driving again because it’s summer and because the relaxed rules dictate it. The south-facing Malahat traffic on Sunday afternoon ran like in the good (bad?) Old days.

BC Ferries’ numbers reflect the increase. Before travel restrictions were lifted, ferry traffic was half what it was before the pandemic. On Sunday, the number of passengers decreased by only 30 percent compared to 2019, the number of vehicles by only 15 percent. A big upswing is taking place. People are on the move again.

But there’s more to the gasoline price jump, said Dan McTeague, president of an organization called Canadians for Affordable Energy. (You may know him from his time as an analyst at GasBuddy.com or as a Liberal MP.)

There was a big spike in the wholesale price of gas after the Phillips 66 refinery in Ferndale, Wash., Suffered an outage last week, McTeague said. That helped drive Victoria retailers to pay $ 1.49 a liter.

They had no choice but to raise their prices.

And there will be more pain from the Victoria pumps along the way, he predicts.

“It will go higher,” he said on the phone from Ontario. “Sometime in the next month you will pay seventy dollars.” (He plans to add a gas price predictor to his website “preiswertenergie.ca” soon.)

He breaks down the cost Victoria retailers pay for their gasoline. There’s the 10-cent-per-liter federal excise tax. There’s the 9.9 cent carbon tax. There are local and provincial taxes worth 20 cents, including the 5.5 cents tax that helps pay the transit system. There is GST.

Taxes are on top of the $ 1.01 wholesale price, which McTeague estimates add 14 cents worth of costs related to BC’s low-carbon fuel needs. If gas companies cannot meet these standards, they will have to buy carbon offsets, and the cost of offsetting has increased.

The government tends to have a different opinion. You may recall that after a sharp rise in gas prices in 2019, Prime Minister John Horgan ordered an investigation into gas costs (albeit one that ignored the role of taxation).

The subsequent BC Utilities Commission report found that when they compared Greater Vancouver to the Pacific Northwest, there was “a significant inexplicable difference of about 13 cents a liter” that wholesalers could not explain. The report states that a handful of wholesalers constituted an “oligopoly” whose control over distribution networks left retailers with no alternative sources.

As a result, BC passed the Fuel Price Transparency Act, which obliges fuel suppliers to publish certain data, as disclosing the figures would encourage more competition at the pump and encourage Big Oil to cut prices drastically. As it turns out, the legislation came along with the pandemic and prices fell anyway.

But now those prices have skyrocketed again as Glenn Close gets out of the bathtub in Fatal Attraction. And we are shocked – shocked! – because gas prices have never shot up so suddenly, except every year since the 1970s.

So what are you going to do about it? Maybe nothing at all, when you have one of those jobs or an income or a life that means you have no choice but to suck it up and pay for what the pump says. Or maybe you’re one of the lucky ones who can actually choose not to refuel while saving some money and the planet in the process.

jknox@timescolonist.com

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